Facebook reports jump in mobile ad revenue

Posted January 31, 2013 - 07:05
by
Emma Woollacott

Facebook appears to be succeeding in its push into mobile advertising, with mobile ads accounting for nearly a quarter of its overall ad revenue.

During the fourth quarter, it says, total revenues were $1.59 billion, of which $1.33 billion came from ads. And 23 percent of ad revenue - $306 million - was from mobile, compared with just 14 percent in the previous quarter.

During the quarter, Facebook saw its number of mobile users jump 57 percent over the fourth quarter the year before, hitting 680 million. Indeed, for the first time, the company says it had more daily active users on mobile devices than desktops.

"This solid progress on the mobile advertising front should be applauded as a key challenge for Facebook has been how to monetize its growing mobile user base, particularly as an increasing number interact with the platform by only via mobile devices," says Eden Zoller, principal analyst at consultancy Ovum.

"Facebook reported 680 mobile monthly active users in Q4, of which 157 million were exclusively mobile."

Much of the reason for the improved mobile ad revenue appears to have been the company's Sponsored Stories in the mobile news feed and app install ads. Wal-Mart alone delivered 50 million mobile ads.

But the next challenge, says Zoller, will be to monetize Graph Search, most likely via Sponsored Search.

Not all the news, though, was so good. Profit fell 79 percent - largely thanks to some heavy spending - and Wall Street was unimpressed. The company's stock fell five percent following the report.

And Zuckerberg warned that the spending would continue, saying expenses would likely rise faster than revenue during 2013. "We aren't operating to maximize our profits this year," he said.